Transportation News & Views

Some encouraging words for 30/10 Initiative from USDOT

The projects that would be accelerated under the 30/10 Initiative. Click for a larger image.

There was some encouraging news on the 30/10 Initiative from Washington D.C. today. In testimony submitted to the U.S. Senate’s Committee on Environment and Public Works, a key U.S. Department of Transportation official made it clear that in the view of the federal government, one key benefit of 30/10 is that it builds a network of transit — thus making each project stronger.

Attentive readers can probably say it in their sleep: the 30/10 plan proposes to build 12 Measure R transit projects in the next decade instead of the next 30 by using federal loans and other financing — and taking advantage of lower costs involved in not waiting decades to do the construction work. It’s a policy that received the unanimous endorsement of the Board of Directors of the agency.

Los Angeles Mayor Antonio Villaraigosa, who serves on the Board of Directors, also testified to the committee. I’ll post a press release from his office in a few minutes.

Here’s the excerpt from the testimony of Roy Kienitz, the Under Secretary for Policy for the USDOT:

Over the last decade the federal government has made substantial progress advancing transportation projects using project financing programs like the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA), but these programs cannot meet all of the national transportation goals I have described.I testified before this Committee in March (at a hearing with Mayor Villaraigosa from Los Angeles) about the substantial benefits of programs like Los Angeles’ “30/10” program, an ambitious multi-billion dollar initiative to accelerate 12 major transit projects so they can be built in ten years instead of 30. As stated then, I continue to believe that the Federal government needs more – and better – tools to support these types of programs.

Currently, the Federal Government evaluates each of the projects in a program like 30/10 for creditworthiness, alignment with important policies, costs and benefits, and environmental impacts. The Department currently funds or finances these types of projects through programs like TIFIA, the Federal Transit Administration’s New Starts program, and the Department’s multimodal competitive grant program, which we have been calling “TIGER”. However, the real benefit of accelerating a program of projects – not just individual components – is that the full package creates a valuable multi-modal transportation network. Neither Los Angeles nor the nation will get the full benefits of any one project from the 30/10 program without completing the network. That’s why the Federal government can get more value for each dollar it invests through an approach that allows us to accelerate regional plans rather than investing in stand alone projects. (On a traditional pay-as-you-go schedule it could be decades before the network benefits of these types of plans will be realized, if ever).

It is critical for the Federal government to evaluate regional plans in totality before investing in particular parts. Regional plans, like the plan for the 30/10 investments, can provide blueprints for much smarter investment decision-making. When the Federal government fronts substantial money for a program of projects, it should require metropolitan areas or regions to demonstrate the value of the networks that the various projects would create, in addition to addressing the current project-level Federal requirements. Competition for these types of funds could drive creativity, innovation and rigorous analytics, raising the bar for regional planning efforts and capital programs all around the country.

Accelerating the investment of creditworthy future revenue streams, like the Measure R revenues pledged by Los Angeles voters to pay for the 30/10 program, clearly also has substantial short term stimulus effects, potentially generating a huge number of jobs and business activity over the next several years. By playing the role of the patient, flexible lender, the Federal government is in a position to facilitate robust public and private sector co-investment of debt and equity. There are costs for a program like this, but these may be offset by benefits that come from project acceleration and innovations in project funding and delivery.

Encouraging broad public and private involvement in regional efforts to build tomorrow’s transportation networks could be a big win for the country, especially if these networks provide new transportation choices for travelers; the key is ensuring that these networks are merit-based, providing innovative, multi-modal solutions for the movement of people and goods. From our preliminary understanding, Los Angeles’ 30/10 program is the kind of forward-thinking program that could really benefit from a new approach that focuses investment on major regional networks that are supported by substantial co-investment from a variety of sources.

It sounds good. It’s also clear from reading the full testimony that in the view of USDOT, the 30/10 plan will have to be included in the next ginormous federal transportation spending bill. The last one was signed into law in 2005 and the current one was due to be reauthorized a couple of years ago but has been delayed for numerous political reasons. It’s expected to be taken up by Congress next year. Cross those fingers, people.

The prime reason Angelenos even thought about a Subway was the false promise to reduce traffic congestion. The DEIR shows that the Subway will reduce traffic congestion by 1%. $10 Billion for a 1% reduction?!?

The 30/10 Plan needs to distinguish the purposes of transportation. When we can Tele-shop in Virtual Stores from our homes, the nation will need far fewer subways as people will shop from home. (Look at Cisco tele-shopping on You Tube) We will need much better long distance freight transportation.

Virtual Presence, which is already upon us, means that there will be at least a 30% reduction to local traffic and a similar reduction in demand for office space, and those estimates is based on 1992 telecommuting technology. We are entering the era of de-centralization and a form of de-ubranization. (Look at Cisco’s You Tube videos) This strikes terror into the hearts of real estate developers will make billions by constructing 75 to 100 story high rises.

The advent of life size, 3-D TV monitors means that we can be virtually anywhere at the speed of light. That ability dramatically reduces our need to physically go places.

The only people who gain from this hurry-up 30/10 timetable are the politically connected fixed-rail corporations who stand to make trillions of dollars constructing subways before the entire nation realizes, that all the new subways were a waste of trillions of dollars. In ten years, no one will be dumb enough to build a subway in Los Angeles as the existing streets and freeways be less and less congested. So when you do want to physical travel from downtown to Santa Monica, all the surface transportation will be fine and dandy.

The subway alignments that have funding at present would cost between $4 billion and $4.3 billion in 2009 dollars. Due to inflation, those costs could rise to an estimated $5 billion to $5.3 billion if the subway is built under the 30/10 timetable (i.e. the next decade) or an estimated $6 billion to $6.3 billion under the Metro long-range plan timetable (Westwood by 2036). I think it’s perfectly fine to have a civil debate over the worthiness of the subway project — all the above figures are a lot of taxpayer money — but I do think it helps if we stick to the facts.